Technologies supporting automated underwriting processes are gathering momentum in the United States. New data-driven methodologies have emerged, and insurers have begun to sell insurance to the middle class, a group that has been underserved by insurers focused on selling to high-net-worth individuals.

The solutions, which have been evolving since the 1990s and have been used widely in the United Kingdom, South Africa and Australia, have been tracked by consulting firm Aite Group LLC, which published a report on the subject that provides an overview of automated underwriting platforms available in worldwide life insurance markets.

Based on roughly 25 Aite Group conversations with solution providers and their clients, as well as other industry participants, the report also provides insight into the trends driving the adoption of automated underwriting platforms.

Aite Group qualifies automated underwriting as the life insurance equivalent of straight-through processing: automated final decisions on insurance applications without intervention by a live underwriter. According to Aite, it is also part and parcel of insurers' strategy to expand footprints in emerging markets, particularly India and China, where huge volumes of low-face-amount policies are sold. Today, a range of such solutions is available in the worldwide marketplace, notes the firm’s report.

"Life insurers are finding that automated underwriting solutions can provide many benefits, including a reduction in underwriting time and costs, and a means to reach new markets efficiently," says Clark Troy, senior analyst with Aite Group and author of this report. "Reinsurers offer focused solutions, while IT vendors offer integrated ones with lower enterprise total cost of ownership benefits to clients. Though reinsurers have a slight lead on decision logic, big IT vendors may be fast followers if interest in straight-through processing continues to grow."

The report profiles solutions provided by 11 reinsurers and IT vendors, including firms such as Accenture, CSC, General Re Corp., MajescoMastek, StoneRiver, Swiss Reinsurance Co. Ltd., and Transamerica Reinsurance.

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